P/C Companies to Congress: Leave Us Out of Financial Services Overhaul

Eleven CEOs from the largest property casualty insurance companies in the country have formed a new coalition to urge Senate Banking, Housing and Urban Affairs...

March 4, 2010

Eleven CEOs from the largest property casualty insurance companies in the country have formed a new coalition to urge Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) to leave them out of the financial services overhaul legislation.

Property/casualty insurers should not be subject to financial-services regulations as they do not pose a systemic financial risk, according to the coalition.

"Throughout this crisis, property and casualty insurers have been an oasis of relative stability, weathering the crisis well without presenting any risk to the broader financial system," said the letter, signed by the chief executive officers of Ace Group, Allstate Corp., Chubb Corp., CNA Insurance Cos., Liberty Mutual Insurance Cos., Nationwide Insurance, State Farm Group, Travelers Cos. Inc., USAA Property and Casualty Insurance Group, W.R. Berkley Corp. and Zurich Financial Services Group. Those companies, according to the American Insurance Association, represent $203 billion in total premiums and represent 62% of the U.S. homeowners market, in addition to large swaths of other lines.

"The property and casualty industry should not be subject to heightened or duplicative solvency supervision at the federal level, nor should bank-centric financial regulation be applied to our industry," the letter stated. The companies are also particularly concerned they may be charged fees to build a fund designed to absorb the financial destruction caused by tumbling firms, saying they "should not be charged any assessments to cover shortfalls that arise from a resolution of a non-insurance financial company."